politics

Azumi under fire for revealing forex intervention level

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I think mentioning a rate is not foolish. In reality they could use it to fool traders into buying yen now and do an intervention well before 75. If something like this is stated, it does not mean it is written in stone. Everyone's reaction that the line must be true could help a bluff.

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It is a problem because governments are not supposed to do manipulate currencies. Governments still do, but they don't talk about it for fear of an offsetting currency manipulation or the offset from currency speculators who will weaken the effort and line their pockets.

Still, Japanese bankers have insinuated that they may do exactly this. Their hesitancy was being charged with manipulating currencies.

Of course, you only have to look to China to see unchecked currency manipulation.

Oh, a maxim from an international business professor, don't speculate in the currency markets because governments are also speculating and have vastly more cash to play than you as a minor investor. Look at what the government dumped in the currency markets, 9 trillion yen ($116 billion). You can't compete with that unless you know it will happen, and then you go to jail if you are found out.

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Either a brilliant hint intentionally and strategically dropped or yet another idiotic politician. Using Ockham's razor, which explanation should we favor...?

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What do you expect when you put a former NHK announcer in as the minister of finance?! This is completely on Noda for putting Azumi, who I've said many times is in way over his head , in this role.

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GDemmonsFeb. 12, 2012 - 04:13PM JST

JGal...that is what selling yen means...lol...Japan no longer has control over its own currency, and interventions have proven mostly to be a waste of time. Japan has to fix its social and political situation, in order to effectively restart it economy again. The problem is that the people in gov't do not care about the rest of the population. They have it good, so that is what matters. Japan's wealthy are moving boatloads of money to Singapore to avoid the coming losses when the govt and banks can no longer sustain the internal debt load, and begin wiping out savings and investment funds held by private citizens, claiming it is the only way to fix things. Long term investment here is a fatal decision.

Japanese debts are 95% internal meaning they are relatively safe. So it is wrong to assume that the government will no long be able to sustain the internal debt load. The gov merely has to raise some tax and print some money as the last resort. The Japanese economy is still based on manufacturing so it's safer than the economy that base it on finance like the U.S .

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billyshearsFeb. 12, 2012 - 05:13PM JST

I tend to think that by "letting the cat out of the bag", he has made certain the yen won't dip below 76 yen to the dollar again! Who's going to dare buy the yen at 76-yen level when they know there's a huge intervention imminent?

Hedge funds will lower the yen until 75 yen and then buy yen back to make money from the intervention. That's what they do. That's how average Joe blow trader got screwed in the last intervention announcement. By announcing that the gov is going to intervine, one may think people will not buy yen anymore but the hedge funds purposely bought yen to screw the average joe traders.

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JapanGalFeb. 12, 2012 - 02:00PM JST

Print lots of Yen. That will fix it.

You are right! Printing yen will devalue the yen. People should see how much the U.S and China has printed money in last few years compared to how much the yen has been printed. 76.5 yen is still cheap if you see it respectively.

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sf2kFeb. 12, 2012 - 07:12AM JST

In a rare moment of transparency, Japanese are shocked! That's pretty scary in of itself

That's a stupid comment. You shouldn't reveal the forex intervention line because the hedge funds will come and screw the market. Your comments makes no sense.

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A perfect storm, and the captain has admitted he no longer has control, time to jump?

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just peg the yen to the USD at a fixed rate already..................................

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I tend to think that by "letting the cat out of the bag", he has made certain the yen won't dip below 76 yen to the dollar again! Who's going to dare buy the yen at 76-yen level when they know there's a huge intervention imminent?

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The problem is that the people in gov't do not care about the rest of the population. They have it good, so that is what matters.

Do you really believe that? It sounds like a sweeping generalization based on shallow thinking.

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JGal...that is what selling yen means...lol...Japan no longer has control over its own currency, and interventions have proven mostly to be a waste of time. Japan has to fix its social and political situation, in order to effectively restart it economy again. The problem is that the people in gov't do not care about the rest of the population. They have it good, so that is what matters. Japan's wealthy are moving boatloads of money to Singapore to avoid the coming losses when the govt and banks can no longer sustain the internal debt load, and begin wiping out savings and investment funds held by private citizens, claiming it is the only way to fix things. Long term investment here is a fatal decision.

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Print lots of Yen. That will fix it.

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I am not sure it's a screw-up to say that "we will weaken in the instance where the yen trades below 75". This is about controlling the upsurge, not trying to talk up a falling currency.

The J-government always has the ability to limit the upside on the currency, and I wonder how it costs the government if they have the trading community keep the currency above 75 (77-78 range), rather than them having to buy FX (or just print a lot of yen) to do it.

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Funny how Japanese have the reputation as being so stoic and circumspect, but so many politicians get themselves in trouble every year because they cannot keep their mouths shut. My guess is that it happens because the guys like Azumi really have no experience in the area that they are supposed to be minister of, so in order to sound like thye know what they are talking about, they spout off anything that comes across their mind. In other words, they are the epitome of the saying "They know just enough to be dangerous".

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"Azumi defended himself, saying he was simply reading rates that were shown to him on a board at the meeting."

So he 'gave the order' and helped by intervening, but he only read rates that were shown to him? Once again Azumi screws up... guess he better go 'visit' the Kuriles by helicopter, or fly close to Dokdo -- time to take the focus off!

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sf2k

In a rare moment of transparency, Japanese are shocked! That's pretty scary in of itself

It's bad financial politics in any society for the government to place a FX line in the sand. The Swiss did it successfully because it's a minor local currency. The Yen is one of the big boys and to maintain that line in the sand might well cost the japanese taxpayer billions of real currency and earn FX traders billions of our money. It could create a similar situation to Britain's Black Monday. Even then the British FX line in the sand was inferred, rather spoken.

I don't think I've ever heard of this happening before and is totally stupid and clueless.

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Calculated tongue slip? Hawk hiding talons?

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In a rare moment of transparency, Japanese are shocked! That's pretty scary in of itself

Well, it's not so much they care about this disclosure but that people might demand more transparency everywhere. That's something bureaucrats cannot allow to happen --that's their house of cards.

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In a rare moment of transparency, Japanese are shocked! That's pretty scary in of itself

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